You go to work for a landscaping company, and the first transaction you are asked to record is the purchase of rights to 50 tons of gravel from a local property owner for $100,000 cash. Your company will be excavating the gravel over the next five years, and additional costs to develop the site (roads mainly) are expected to be about $50,000. What is the correct journal entry for this transaction?
Box 1: Select the best answer
Debit mineral rights and reserves $100,000, credit checking account $100,000